Walnut sales jumping in Asian markets

Friday

Jan 18, 2013 at 10:01 AMJan 18, 2013 at 10:06 AM

California's walnut crop is coming in larger than expected, but strong demand from Asia, particularly in sales to China and Vietnam, is keeping pace, and reported shipments through Dec. 31 are well ahead of the previous year, industry officials report.

Reed Fujii

California's walnut crop is coming in larger than expected, but strong demand from Asia, particularly in sales to China and Vietnam, is keeping pace, and reported shipments through Dec. 31 are well ahead of the previous year, industry officials report.

That is keeping walnut prices high, which is limiting domestic sales, said Pete Turner, an industry consultant in Stocktion and chairman of the California Independent Handlers Coalition.

San Joaquin County leads California in walnut production, and the nuts are the area's third most valuable farm commodity, worth an estimated $279 million in 2011.

Citing the California Walnut Commission, he said walnut processors had received about 497,000 tons of walnut from the fall crop as of Dec. 31. That's about 6 percent more than the U.S. Department of Agriculture forecast in September and is closing in on the state's record 2010 crop of 504,000 tons.

Processor shipments to customers are running about 3 percent ahead of last year. From September through year's end, shipments topped 252,000 tons, compared with 245,000 tons moved in the same period of 2011, the commission said.

December alone saw shipments of nearly 48,000 tons, down from almost 51,000 tons in December 2011. Turner said that's still considered a good month, especially following heavy shipments in November of 86,000 tons.

Demand from China, Hong Kong and Turkey continues to drive the market for in-shell walnuts, Turner reported, with shipments to China and Hong Kong reaching 110 million pounds by year's end, compared with 72.1 million pounds in the same period of 2011. Turkey bought 32.5 million pounds of in-shell nuts, although that was down from 43.3 million pounds the year before.

Other strong growth markets for California walnuts were Vietnam, where shipments of in-shell nuts rose 154 percent to about 13.3 million pounds by year's end, and Japan, which buys shelled nuts, receiving 8.3 million pounds of nut meats, up 47 percent from the year before.

Outside of Asia, however, the picture was not so bright. Shipments of in-shell walnuts to Europe were down 23 percent, and shelled products were off 14 percent at year's end, the walnut commission reported. Middle East sales of in-shell walnuts were down 32 percent, and North American consumption of walnuts was essentially flat.

"We could have a serious problem, without a doubt, but thank goodness for China," Turner said.

"If we had one problem - and certainly in China - if we lose that customer or a portion of that, we're in deep doo-doo."

Walnut prices remain strong, with prices for shelled light halves and pieces at $4.55 a pound for the popular Chandler variety and $4.40 a pound for others, Turner reported. In-shell price range from $1.75 a pound up to $2 a pound for the Chandler variety.

"I believe the market will continue to adjust, and we may see some softening over the next several weeks," he said.

Looking further ahead, Turner said he expects California to produce larger and larger crops in coming years, especially as recent large walnut plantings, prompted by strong crop prices, come into production.

"We could come up with a 550,000-ton crop next year, easily," he said. "We have not seen the top of the new plantings that came in seven or eight years ago."

The California walnut industry can sell a larger crop, Turner said.

"We can move a great deal more tonnage if we just lower our price," he said.